6 2 Bordeaux Company has three product lines, one of which reflects the following results: Sales Variable expenses Contribution margin Fixed expenses Net loss $215,000 125,000 90.000 150,000 $ (60,000) If this product line is eliminated, 20% of the fixed expenses can be eliminated and the remainder will be allocated to other product lines. If management decides to eliminate this product line, the company's net income will change by 7 Oscar Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Cost $250,000 $500,000 Accumulated Depreciation 75,000 -0- Remaining useful life 10 years -0- Useful life -0- 10 years Annual operating costs $200,000 $150,500 If the old machine is replaced, it can be sold for $30,000. The net advantage (disadvantage) of replacing the old machine is 255